this week, stalemate in the debt talks as tensions soar and the clock ticks. >> i do not see a faster ideal, they dot bue, period. >> where's the president plan? when is he going to lay his cards on the table. >> wall street sounds an alarm but the tea party remains defiant. >> we cannot go on scaring the american people. >> is a deal possible? in this climate of partisan paralysis, two men actually at the bargaining table join thus week. white house budget director jack lew and republican senator jon kyl. and the "roundtable" debate the politics of the divide. plus -- >> i apologize. >> rupert murdoch under fire. heads s ll at his media empire, but will that be enough to save it?

and in africa, a cry for help. millions, threatened by an epic drought, the worst in 60 years. we'll take you there. then, we're live from germany where the american woman's soccer team has a shot at making history. >> announcer: live from the newseum in washington, "this week" with christiane amanpour starts right now. welcome to the program. we've got lots to get to this morning. but, first, some headlines since your morning papers. there is breaking news to report in london. the bbc has learned that rebecca brooks, rupert murdoch's top lieutenant in the uk has been arrested on suspicion of corruption. earlier she resigned from her position as chief executive of news international. in the wake of the scandal rocking the murdoch empire. much more on this developing

story later in the program. casey anthony is a free woman this morning. she walked out of jail just after midnight, 12 days after she was acquitted of the murder of her daughter, caylee. anthony is met by jeering crowds and spirited off to parts unknown. and in tripoli, libya is rocked by explosions after a heavy round of nato bombing. it's been four months since nato launched attacks to force moammar gadhafi from power, still, he hangs on, defined as ever, still refusing to surrender. while earlier this week, the u.s. government recognized the group as libya's government. first we turn to the drama that has washington tied in knots, the battle raising the debt ceiling. no white house meeting that the president and congressional republicans retreated to their respective corner, but behind the scene, furious strategizing in a bid to stave off economic

catastrophe. this morning there's reports of a resurrected grand bargain. is a break through on the horizon? joining me, the man at the heart of these intense negotiation, white house e dget director, jack lew. thank you for joining me. >> good to be here. >> how worried should the americananeople be? is the country going to default? is a deal at hand? >> i do not believe that responsible leaders in washington will force this to default. all of the leaders in congress and the president have acknowledged that they must raise the debt limit, and the question is how. the questiti is,s,o we do more than that? do we do as much as we can to reduce the deficit and take seriously the fiscal problems this country faces. >> is there a grand bargain still on the table? >> there's multiple tracts that are being discussed. it's not a given how we get to raising the debt limit. there are some extreme voices that are saying, we should push it over the edge. i think the risk of taking that path is enormous. the president referred to it as armageddon, higher interest

rates, which are a tax on all american, it would undermine our standing in the world and have a cloud for a long time over the united states. senator reed, senator connell is working on a way to get that done. the challenge is doing more. it's not enough to do what we have to do. we have to do as much as we can to deal with the fiscal challenges. >> sitting here today with the time ticking away. what do you think k the realistic? will it be the mcconnell last-ditch effort which allows the president to raise the debt ceiling and allows republicans or anybody to register their disapproval of it? >> i think what we face is not a challenge of do we have the time. it's a question, do we have the will. the president has shown we must take action and must take it now. he's spoken to the issue in the state of the union, he spoke to it over the last few days to the public. he's pressing these discussions forward that we should do as much as we can. he's willing to take on very, very difficult issues that requires for both sides to move

into areas that milwaukee them uncomfortable. >> let's talk about entitlements. democrats, you heard them tata about not touching entitlement. is that just a public posture, or will that be a part of a deal? >> i think it's very, very hard for democrats to make she's changes and for good reason. they have an effect on people that's really very significant. we are concerned first and foremost about the stability of medicare as a system to provide for the medical needs of elderly. it does contribute to the problems we face in terms of rising costs over the years. the challenge, could we get a balanced package together? it's not fair to ask senior citizens to pay a price, but to ask families to pay for their children's education to pay a price, but to leave the most privileged out of the bargain. everything has to be on the table. >> the president made clear that, depending on the size of the package, there would be different kinds of things that could be done in entitlement. there's relatively small technical changes and structural

changes. in order to get the structural reforms needed in a long run. there has to be a balanced package, that puts taxes, revenues as well as spending on the table. >> does the president have his own plan? what is on the table? you saw speaker boehner say where are the president's cards. >> i think he knows how far the president is willing to go. there's detailed conversations on many, many subjects. the president is shown he's willing to move into space, it's a very hard place for democrats to go. the challenge is, can we find a place where there will be some kind of fairness and balance. leadership takes partnership as well. the president is showing a willingness to go there. we need a partner to work with. >> if it gets down to that. would the president, as representative cantor suggests, do a one-year extension to save the country from going into default?

>> the president is very clear on that subject. it would be a very unacceptable outcome to have -- >> would he do it? >> he's made clear he will not have this debate over should we raise the national debt a year from now. it would be a bad thing for the economy and the country. >> then it could be push into default then. >> i do not believe the country will be push into default. congress knows what it has to do. it's got time to do it. the president made clear what he has to do. and the parties are going to have to come together. it's unfortunate that things have to get to the last minute. sometimes there are no consequences, right now, we're in a place where the world is watching. we should get our business done, congress should get the job done and the president is working with them every day for the last month trying to work with them to get it done. >> some kind of deal, whether grand bargain, or mitch mcconnell effort, whatever it might be. would the president agree toto y deal that does not include revenue raising? >> i think the president made clear there's reasonable steps that can be made to reduce spending. we already made many, many deep cuts in spending. there's more restraint in order. he made it clear for a big deal,

there will have to be balance between revenue and spending. the question is how much can we get done? the president's view is clear. we have to get as much done as we can to give assurance to the market and american people that we have our fiscal house in order. >> if you have to predict, what is the deal that will get done to avoid a deadline, potential catastrophe as we're calling it? >> i think the minimum, i believe the debt will be extended. notwithstanding, the voices of a few willing to play with armageddon, responsible leaders in washington, are not. our efforts over the next days is, in addition to that, do as ch as we possibly can to make the tough decisions. this is a question of leaders coming together and saying, we are going to do hard things on both sides. and the time is now, as the president said, if not now, when. >> jack lew, thank you very much for joining us. >> thank you indeed. >> and the parties in a bit of a cooling off period after a contentious series of white house meetings at one point

tempers flared between president obama and number two house republican eric cantor. witness to it all. leaders of both party, including house speaker john boehner and democratic counterpart nancy pelosi. senate majority leader harry reid and minority leader mitch mcconnell. and so was my next guest, minority whip jonathan kyl, thanks for joining us you heard jack lew saying absolutely a deal will be done and this country will not default. are you there as well with that? >> the country will not default. whether or not there are savings retrieved in the process is the question. >> what kind of deal do you think is done. we heard resurrection of the ground bargain. do you think that's possible? >> unless the president gets off his absolute obsession with raising taxes, republicans are not going to agree to do anything that will harm our economy. and job killing taxes will harm

our economy. there will not be a default. as to whether or not we can achieve savings in the process, again, depends on the president. >> let me quickly ask you, how willllhere not be a default? what do you believe will be the outcome? >> republican leaders have made it clear, if all else fail, if our efforts to adopt legislation to cut the deficit, put a straight jacket on it, balance the budget, so-called cut, cap and balance, i think that passes the house. if that doesn't pass the senate, if there's no other way to reach some kind of savings agreement, at the end of the day, republican leaders made it clear we will not be the ones who put the government into default. >> that's the mitch mcconnell last ditch effort? >> it's mcconnell-reed. >> that will be what you agree to if all else fails? >> that's what the senate is proceeding with. but the house of representatives will have to decide what they will do. but at the end of the day i don't think there's going to be a default.

>> you talk about taxes. obviously, the republicans made that a line in the sand, no new taxes. and yet, poll after poll recently said the american people are not with you on that approach. the majority said there's a polled approach. whether quinnipiac, the majority of republicans said there should be no new tacks. do you think you're out of step with the american people on this? >> christiane, i haven't seen the polls you're referring to. i looked for polls that backed up the president, couldn't find any. the last poll, if i could, just three days ago, the question was, do you think a tax hike should be included in any legislation to raise the debt ceiling, 55% say no. 34% say yes. and even the majority of independents say no. >> we could quote polls all of the time. but the quinnipiac said 67%% of americans say debt reform

should involve a balance of tax especially on the wealthy and not even a majority of republicans said there shouldn't be any tax increase, so, you said you don't want to do anything to jeopardize the country's standing, and there won't be a default. you said the house may have a different attitude. can we play what michele bachmann has been saying. she's a leading member of the republicans, and is a presidential contender. >> i know i'm raising the debt ceiling right now. i've been here long enough, that i've seen a lot of smoke and mirrors in the time i've been here. i haven't been here long enough to forget who i serve and where i come from. people across america are saying the spending is what has to be addressed. it's too much. it's got to be limited. >> do you agree with her that it is all smoke and mirror, warnings from the economists, treasury secretary, from the chairman of the feds? >> i don't agree with that. i agree spending is the problem. let me show you the chart.

the very end where spending goes way up. demonstrates, it is spending that's the problem. that's why republicans so insist on addressing the cause of the problem, mainly too much spending. >> so should be pleased that your negotiating or position moved the president towards very significant proposal on spending cuts. >> i wish i could say that's true. you notice that jack lew did not answer your question. the president did not answer jake tapper's question, the very first question at the news conference. what exactly who you do with regard to medicare to effectuate savings. we've identified over $100 billion a year in savings, just from medicare, medicate and unemployment compensation over payment. this isn't hurting anyone entitled to it. these are payments that shouldn't be made. yet the president is saying he is willing to look at unspecified reforms. >> you also heard what jack lew

said if it was part of a deal it would involve entitle. >> we haveve no idea what he's talking about. thth's the problem. republicans are notot willing t make a deal based on some vague commitment the president might look at something he won't identify. >> right now, as both parties e in this, i guess stalemate, critical impasse, you've also heard senator mcconnell say, just this week and to a radio interviewer, that this politically could jeopardize the republicans, that being sort of blamed, which they could be, for a bad economy, c cld, quote, destroy the brand and it wouldn't be good going into an election. do you agree with that? >> i don't really look at the politics of it. what we're looking at is what's good for the country. we know, raising taxes on a weak economy is not good for economic recovery and job creation. our first thought, first let's do no harm to economic growth and putting americans back to work again. that's why we're insistent that

we should focus on the real problem, the spike in spending and not this phony problem of taxes. >> do you have a prediction how many in the house would be against at all cost raising the debt ceiling as michelle bachman sasa? >> no, i don't. i was simply answering your question what i think would happen and i don't think republican leaders will allow the country to go into default. >> senator kyl, thank you so much for joining us. and, coming up, while the markets warn of the dangers of a default, a freshman tea party congressman makes his case for holding out. and he joins our "roundtable," next.

i refuse to help barack obama get reelected by marching republicans into a position where we have co-ownership of a bad economy. if we go into default, he will say that republicans are making the economy worse. that's the argument. he could have a good chance of winning. and all of a sudden, we have co-ownership of a bad economy. that is very bad positioning going into election. >> blunt words from senate minority leader mitch mcconnell warning that a debt default could destroy the republican brand. for many new gop congress

members these day, compromise equals capitulation. they could very well hold the cards in the debt talks and the big question, how will they play their hand. joining me to make sense of all of this. george wiwi, cokie roberts, congressman raul labrador, i republican tea party freshman from idaho. matthew dowd, former strategist for george w. bush and abc correspondent, jonathan karl. you heard what we plpled from mitch mcconnell. do you take his warning? is it bad for the republicans right now? >> i do. i think the president would like -- let's go back, for months, he has clear and emphatic on what he wanted, a clean lifting on the ceiling which is no restraint on the spending merry-go-round. now he wants $4 trillion in dedecit reduction. what he would do is have the republicans sign on to tax increases which demoralizes the republican base and fractures the party and enable him to run

as a born-again deficit producer. my feeling the house will have its say and the sesete will reject it. the senate has its say and house rejects it and the last standing will be mcconnell-reed, something like that will be passed. >> let me go straight you to. you said you would not vote toto raise the debt ceiling under any circumstances. you heard what senator kyl said, there will not be a default. are you willing to push it that far? >> i never said i would not raise it under any circumstance. i said i would not raise it unless we make long-term systemic changes the way things are done in washington. we just had an election in 2010 where the american people asked us to change the way things are being done in washington, d.c. that's what we came to do. i want three things, they are simple and the president claims he agrees with them. i want to make sure we cut spending in washington, make sure we have a cap on the amount of spending we do and a balanced budget amendment.

you talk about polls, 80% of the american people want us to have a balanced budget amendment. i'm not sure why the president is standing in the way of that. >> what do your sources say about where the deal is. you heard jacob lew and senator kyl talk about what might happen. where are the talks. >> the single thing is nothing can pass. nothing can pass. not the president's idea. not the republican idea of cut, cap and balance. nothing. and certainly not this plan, the triumph over politics and policy that mitch mcconnell has outlined which basically gives the authority to the president, but allows the republicans to score political points, i see no chance of that passing in the house. >> something has to. >> something has to. i don't know that something will by august 2nd. >> it something doesn't by august 2nd, i think we are in real trouble. and people who say that we are

concerned about the deficit, nothing can be worse for the deficit than not raising the debt limit. i mean, you would then have interest rates go up, they compound and the deficit would climb dramatically. how you get to that point of going to default and say you're for deficit reduction doesn't make any sense logically. >> politically, both sides know they have to pass something. politically. the risk of not passing something is much greater than some part of the constituency doesn't want. i think in the end. they up it against the deadline and crisis, which is actually important. most of the time congress won't do anything, unless there's accountability. in the end, politics will force something, whatever it happens to be, some smalalcombination of cuts with raising the debt ceiling. politically, the president and congress both know they have to pass something. >> i'm curious, how does it work politically, to say we won't raise taxes on billionaires, as the president keeps saying. >> let's talk about this. the house majority.

house republicans passed a budget that actually talks about reforming the tax system. we already agreed to that. we said we want to makaksure that we broaden the base which means getting rid of those loopholes and we want to lower the rates. the difference between republicans and democrats, the president wants to get rid of the loopholes to increase spending. that's all he wants to do. everybody gives him credit for being the adult of the table. this is the man who came to congress and asked us to raise the debt ceiling without any spending cuts. this is a man that gave us a budget that didn't even get a single vote in the senate now she's saying he's a deficit hawk. i think that's a joke. he's never been a deficit hawk. >> do you think the president and speaker play this as well as they can, right? >> give the two constituency, the tea party movement which i think is the best thing that happened in american politics,

the tea party -- >> they gave us reagan. >> the problem is, the tea party movement, which doesn't understand the fundamental paradox, which is, if washington were as easy to turn around as they seem to think it is. we wouldn't neededhe tea party movement which we do. the president did not get elected to cut entitlement programs, to cut anything for that matter. he has proposed -- he's been specific about $2 billion of spending cuts in 2012. that's an error in the gm bailout. >> what i don't understand, the big mystery to me why the republicans didn't use the president's phrase, "call his bluff." the president was talking about cuts to social security and medicare and the republicans pulled out on taxes. the initial reaction to the leaks on those stories were democrats screaming bloody murder saying they were not

going to let the president and john boehner cut medicare. before that played out t t republicans walked away on taxes. >> what i think is going on is how broken the process in washington is. how badly poisoned is, how neither side trust each other. even if they were going to call -- the lack of trust is so big, they can't even like reach agreement on some small thing. each side, in 2010, the republicans getting elected in congress, and barack obama in 2008, basically the message was, fix washington. >> that's right. >> if it's broken, fix washington. and right now, no matter what happens, nobody is going to one in this. >> you're right, the majority say they want to see the parties compromise and reach agreement on the big issues. >> when congressman labrador said we were elected to do something. what i think the american people keep saying, you were elected to do something, to come together and make compromises and make government work. why isn't that a message that you hear? >> compromise always means increasing taxes today and doing

cuts in ten years from now. that's the problem with the american people. amamican people will not stand for that. i think we can do something, we can come to the table and actually work together. it is clear the president is unwilling to not increase taxes. he's unwilling to do something serious. i want to know what his plan is. so far, we have no idea what his plan is. he has not put anything on the table. all he talks -- theyeyave all used the same phrase, grand compromise. because that's poll tested. apparently people like that. but it doesn't mean anything. >> in the meetings with vice president biden, lots of specifics we talked about. they have the number, $1.4 trillion. >> but they were all rejected. >> only $2 billion in cuts until 2012 which will never fly with these guys. to be clear -- can we be clear on tax issues. are they proposing raising

the rate or talking about closing loopholes -- >> right now, the talk of raising the margin rates is absolutely dead. it's a question, what do you in tax reform and do you have a net increase by closing the rates or do you, as republicans want to do, simply lower the rates with that additional revenue? >> again we keep talking about polls, this week, there have been a lot of polls saying the majority of americans want a balanced approach. revenues and cuts. >> and i don't agree that there's been a lot of polls that say the majority -- most said the majority of americans don't want to increase taxes. if you look at the gallup poll that said 51% of people do not want to increase taxes. i actually disagree with you there. there's been some polls -- when you use the phrase balanced apapoach, everyone wants a balanced approach. i would have answered yes, i want a balanced approach. my definition of balance is different than -- >> i think politically, you're in a very risky place. because i do think that the

president is getting through by saying over and over again, that republicans want people with corporate jets not to have to pay taxes, people who make a billion dollars not to have to pay taxes. that's not a politically good spot to be in. >> you can't balance the budget by raising taxes on corporate jets. >> talking about the politics. >> part of the problem is, the premise of both parties is actually not true. the premise of the democratic party is you can't cut -- in the middle of an economic downturn, you can't make cuts in the budget, because it makes it worse. that's not demonstrated to be true, historically, republicans say you can't raise taxes in the midst of an economic downturn because it's going to make it worse. that's not demonstrated true historically. both sides are talking points aren't really true. >> so, george -- >> when it comes to the republican presidential contenders, they've been curiously quiet. certainly the front-runner, mitt romney. what is all of that about?

>> getting involved in this is optional. they can't control w wt's going to be said by people who will then be assumed to be their surrogates. it's very clear, if you are going to win the republican presidential nomination, you're not in favor of raising taxes at all. this is not just about what is good for theheconomy in the next six months. this is a vision of what we want to have in the way of a government. this, by the way, is why we have elections and we're teeing up the 2012 election, which is going to settle this. not this action-forcing moment on the debt ceiling. >> that's exactly right. let the 2012 election settle it and now let's get off this precipice and go ahead and act like grownups in washington. >> the problem with that, i think this will unfold and bleed out all over the republican nomination process. the problem is, that's what we've been doing for 20 years. any time we say we'll settle this out, have another commission, we're going to do this. we get to the point, have a crisis, deadline, like everybody has, whether work, relationship with kids.

they set a deadline. if they don't meet the deadline there's accountability. washington needs to have accountability for their actions, both sides ought to have leadership, get something done whether smaller or big, not just punt the ball to get to another election. that's what we're doing. >> it's actually maddening to think we go through another election to solve this. right?t? >> we played a little bit what michele bachmann said, it's time to stop scaring the american people. i'm not going to raise the debt ceiling, et cetera. she's making that the focus of her campaign. but she's also been talking about other things. a lot of other things are being talked about this week. a lot of attention on her husband and whether the clinic advocates the controversial therapy y turn gay people straight. but wasn't hasn't gotten scrutiny, candidates position on homosexuality.

she called it personal enslavement. percent not despair. do you think it's a big issue as people put more scrutiny on her. >> what she said seven years ago is, "a," of dubious relevance, at this point, and, "b", will not hurt her in the eye of the caucus us. >> first of all, she's prejudice against homosexuals, with her statements and actions. that's absolutely true. she believes it's somehow bad behavior or something, that's the truth. it may not hurt her in the republican primary as an issue, i think it hurts her, the first thing republicans are looking for is somebody that can beat barack obama, when these things come up, it's less likely they'll vote for her. not because they disagree with her on this issue, but they think it's less likely she can win a general election. which i think helps potential candidate governor perry. >> i was going to ask you about that. do you think he's going to get

in? >> yes. >> yes. >> if i were betting in vegas, i would put a large amount on that. >> representative, last question for you, how will the dynamic be affected between perry and bachmann? >> i think it's going to be interesting. i've kept my powder dry. i have not endorsed any candidate yet. i was hoping that a couple of other people got in. one that's not going to get in. chris christi. rick perry will probably get in, and i'll probably wait a couple months, to see how he does and how he performs. >> on that punt -- >> woman's soccer. >> coming up, woman's soccer exactly and rupert murmur dock. he's going to be called before a parliamentary commission next week and we have special insight from the top media reporter who covered murdoch for years. >> announcer: this week with christiane amanpour from the

newseum in washington, d.c. will continue in a moment after this, from our abc stations.

a bombshell development in the the scandal that houseserupert murdoch's tabloid. rebecca brooks, until just this

past week, is now under arrest in london. she faces charges of corruption and phone hacking and her arrest comes at a critical time for murdoch. tuesday, british lawmakers will grill the media baron when he testifies in front of parliament and each passing day brought new revelations into the scandal. the shock waves are quickly spreading, even across the sprawling empire which includes television, newspaper properties spanning the globe and key in the state. forcing the man in the middle of the storm into unprecedented damage control. here's jeffrey kofman. >> reporter: for a man that doesn't like to admit his mistakes, this has been a bruising week. for rupert murdoch. >> i was appalled to find out what happened. >> i apologize. >> he apologized to the family of millido you letter.

the teen was murdered in 2002. last week it was revealed the girl's voice mail was hacked and messages deleted by a reporter in search of sensational stories. giving the do ydowers false hop she was alive. after the meeting with murdoch, the family emerged with their lawyer that described the tone as humble. >> he did apologize many times. >>. >> reporter: that was friday. yesterday, mororapologies. this ad appeared in every london newspaper. the news of the world was in the business of holding others to account. it failed when it came to itself. we are sorry. signed rupert murdoch. rarely has a man so powerful had to publicly eat so much humble pie in a single week. last sunday, he shut down his profitable tabloid here "the news of the world" after it was mired in allegations of criminal activity. wednesday he bowed to public

pressure and canceled a $12 billion tv network building. friday morning. his most loyal lieutenant who refused to resign, redesigned but after a revolt in his own family. his daughter, railing that, brooks has, well, bleeped the company. this morning brooks has been arrested. and the scandal has even crossed the atlantic. les hinton, the head of the company that operates the wall street journal, also resigned. he was in london when much of the criminal activity took place. and there's the 9/11 allegation, that the reporters were trying to tap the 9/11 victims cell phones in search of more sensational headlines. all of that was going on for years. how could that be? the reality is police and politicians have been either too friendly with murdoch or afraid of him. afraid if they spoke up. his papers would destroy them.

now the fear is gone, replaced by fury. >> many, many, wholly innocent men, women and children, bought and sold by news international for commercial gain. >> reporter: no longer intimidated by murdoch, british politics are putting his empire under the microscope. this week it established a judicial inquiry, look at media ownership and active. saying that murdoch will be saying sorry yet again on tuesday when he appears before a committee of the british parliament. he initially refused but after tsunami of scorn he will face an inquisition. for "this week" jeffery kofman abc news, london. >> and i want to bring in one of this country's foremost media

critics, who reported on rue put murdo murdoch, ken auletta. thanks for joining us. >> my pleasure. >> this morning, we saw rebecca brooks arrested and les hinton resigned. is this going to be enough to stop this bleed? >> no, if you think about it, news corps made the claim that what we're talking about is a few rotten apples. what we see with the arrest of rebecca brooks today and resignation much mr. hinton yesterday, you have a rotten barrel problem. and i think there will be more arrests. think about it. no newspaper reporter in this world can go to an editor and say, i have the following scoop, without that editor saying, who is your source, how did you get that story? there's multiple editors

involved in news of the world, and many have not been named or implicated. then you have the question, who paid tens of thousands of dollars to get stories from the police. that, by the way, is illegal, as is hacking into phones and presumably that's not a decision made by the reporter, it's made by the business side. we haven't heard who those people are. you'll see many more apples falling from this tree. >> and it has engulfed the british police, the metropolitan police. you said there will be many more apples falling, what will this mean for, let's say james murdoch, his son and executive? >> he has been in charge for the last several years of news corps international, newspapers in england. reportingly he's signing off on budgets. he's next in line there. he's got to be worried, as his dad has to be worried about james, who, up to now, had a sterling reputation, on the other hand, he made claims that this was the end of it.

he paid off at least 1 million pounds, maybe 2 million pounds to silence witnesses, or to settle with people who have been hacked into. james murdoch has a lot of answering to do when he appears before parliament tuesday and probably after that as well. >> ken, this so far as not crossed the atlantic, there's been words that they might want to launch an investigation, but what do you think it could mean to rupert murdoch's u.s. holding, whether it's foxnews, whether it's "the new york post"? >> you've got several question, first of all, if h h newspapers hacked into people's e-mails and cell phone activity in europe, did they do it here in the united states? there's a lot of celebrities and politicians they cover here. the new york post, for instance, did they do something? then you have the question, under the american foreign corrupt practices act. it is illegal for an american company to pay bribes to police. they paid bribes to police, we

know that. therefore, there's a possible crime committed there. then you have the question, under fcc rules if you own television stations, you have to have good moral character. someone can challenge the moral character to run those stations. that puts into danger his broadcast networks. then you have the question, here murdoch is actively trying to move into education reform programs. he hired joe klein, very respected chancellor of new york city schools to do that. are they going to allow companies to take over education programs when the company is in such bad -- it raises questions, christiane about his politicalal power, who is going to take e political doe snake from rupert murdoch. who will want to be seen in his company? he has real issues to deal with. on the other hand, this is a $32 billion company, and a very

successful one. ken, thanks indeed for joining us. ken auletta. writer from new york. and coming up, we take you live to frankfurt, germany where the u.s. national team son the brink of making history. soccer superstar, brandi chastain joins me to preview the game game but first a cry for help. eastern africa in the midst of a catastrophic drought. it's a story that demands attention and we'll bring it to you next. it was a challenge that nobody had undertaken before. and we didn't know whether we could do it. when kennedy announced we're going to go to the moon, that was a thrilling proposition. they said, if you could start a computer over from scratch, what would you do? i thought, wow, this could really change things. if you have time for a story, i'll tell you why.

impact wool exports from new zealand, textile production in spain, and the use of medical technology in the u.s.? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 75% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. dadaab, kenya, ground zero for a horrifying story of human suffering, a story until now received scant attention here in the united states, but thousand of somalis fleeing to kenya to escape the epic drought ravaging their homeland.

it's the worst drought the region has seen in 60 years, and it's left more than 10 million people in desperate and dire straights. there is a cry for help, and abc is the first american television network to report from the crisis zone. here now, abc's lama hasan. >> reporter: the images are impossible to forget. so difficult to comprehend. >> i just saw a mother that lost three of her children on the way. >> reporter: a dying child. a mother grieving. a father, helpless. they are the victims what aid officials are calling the worst humanitarian crisis on earth. >> the people that are arriving are absolutely desperate. they haven't eaten for weeks. they've been traveling for a long, long time in very difficult situations. >> reporter: a deadly combination of severe drought. the rains haven't fallen here for two years.

a huge spike in food prices and a brutal civil war in the country they left behind. somalia where it is too dangerous for aid workers to operate. so they are walking as far as 50 miles to get to this place. the dadaab refugee complex, with just the ragged clothes on their backs, in desperate need of food and water. the trek can take weeks in terrain void of rain, except for the car contacts that litter the land. flying into dadaab, we can begin to grasp the scope of this crisis. a complex to haas 90,000 people. they passed that number a long time ago. it's very difficult to explain this disaster. almost 400,000 somali refugees call this place home. living in tents like this as shelter. and living over a 30-mile square mile area and every single one

of them has a story to tell. a mother who makes the most heart wrenching decision imaginable, leaving her child behind because she was too sick to go on. we left this m mher who was walking with three children and had to leave one young daughter to die by the side much the road. she herself was too traumatized and too sick to tell us more than that, not even her name. not far from the tents, the camp leader took us to this woman, who traveled for 35 days with seven kids to get here. she lies listless covered in chicken pox. >> is she getting enough food? >> you finished your food. >> her kids are malnourished and she's still waiting to see a doctor. >> unless we get humanitarian aid into the world to scale our operations to meet the growing needs this crisis can turn into a catastrophe.

that's when we have to stop. but for now, they cannot stop them from coming, a steady stream of people, 1400 of them spilling across the border every single day. no one knows how many more are on their way. for "this week" lama hasan, abc news, dadaab, kenya. >> and years ago, i covered a deadly famine in the same part of africa. it was a catastrophe when the first president bush was forced to intervene militarily. and now it seems to be happening again. to find how you can help. visit our website at abcnews.com/"this week." we'll be right back. somewhere in america, a city comes to life. it moves effortlessly, breathes easily.

it flows with clean water. it makes its skyline g gener and its population healthier. all to become the kind of city people want to live and work in. somewhere in america, we've already answered some of the nation's toughest questions. and the over sixty thousand people of siemens are ready to do it again. siemens. answers. and now, the "sunday funnies."

>> the u.s. is now in serious danger of defaulting on our foreign loans, which explains why china showed up and broke the statue of liberty's knee caps. >> obama agreed to almost 4 trillion in cuts. but house majority leader eric cantor explained, the republican's only confession will be, quote, the fact that we're even discussing voting for a debt ceiling increase. okay. they agree to negotiate. and in return, the president gives them everything they want. it's like the old saying, you scratch my back, i get my back scratched. >> someone has to tell rupert murdoch, when he's making gesture, he's not actually shooting evil rays from his hands. >> up next, america's woman's soccer superstars on the world stage. we're live from frankfurt with a preview of today's historic match.

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and now, "in memoriam." ♪ ♪ that's the way we all became >> marsha, marsha, marsha. ♪ >> no one wants to be alone, or cold or hungry or homeless or living in a cardboard box. >> and we remember all of those

who died in war this week, the pentagon released the names of eight service members killed in iraq and afghanistan. ♪ we'll be right back. this...is the network.

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the united states are in the world cup final for the first time in 12 years! >> and, with that, the u.s. national woman's soccer team, secured a spot in the world cup finals. a blazing moment of triumph after a tough season of adversity. today in frankfurt, germany, americans poised on the brink of history, one win away from the record shattering third world cup championship. and it hasn't come easy as the coach confessed it's not been an bumpy one. a crushing loss to sweden had the team leftt for dead, then riding high, the american women dealt a final blow to france, securing that place in the world cup final. their story captured the public imagination, their success, proof positive of the old adage, what doesn't kill you, makes you stronger. today they face off against japan.

we remember the american team's last world cup win in 1999. this unforgettable picture of star player brandi chastain said it all. >> and brandi chastain joins me from the site of today's woman's world cup final in frankfurt, germany. of course no one cananorget your victory. what do you think is going through the minds of the woman's team right now. this is the biggest match of their lives. >> it absolutely is the biggest game of their lives. besides one player, none of them playing today ever played in a final of the world cup. i think first and foremost, they will be very excited. but then they have to turn that quickly to being let's get ourselves calm and composed and

approach this game like any other game we played so they can keep their emotions in check. >> the u.s. post said play with an american attitude. what do you think that means? >> the american attitude she's speaking of, the will, determination and do anything mentality to win the game. abby wambach has been quoted many times how this team found itself with its back against the wall and they wouldn't let the game go. they kept fighting and fighting and working together and ultimately in the 122nd minute they scored a goal against brazil. that just shows, when you have that spirit, anything is possible. >> so how do you feel about the game today, brandi? >> it's a clash of styles. japan played a possession-oriented team. i've heard them compared to barcelona and the way barcelona enjoys the pressure of having the ball at their feet yet not being knocked off their game. and the u.s., on the other hand is powerful, strong and athletic. they love to fight and grit it out.

it will be a clash of titans in terms of their two styles. who will break first? in my opinion, i think the u.s. has a strong, athletic team that will push japan to their maximum, and i feel at the end of the game, the u.s. will be victorious. >> japan, a little bit of a crowd favorite as well. because they played against much adversity. obviously recovering from the tsunami and earthquake. how do you think that will play on the american psychi? >> there's no doubt about that. japan, emotionally speaking are, are the world favorite. they want to see -- everybody wants to see them do well for what they've had to deal with as a country. just recently. but this is a game. and it's played between 42 players, 11 players per team on the field. and there has to be a winner. and the u.s. is happy for japan to be there. but once the whistle blows, all of those things go out the window, and you will compete and

example toeng be the best on the day. >> brandi chastain, thank you so much for joining us. we hope that this brings much more attention on u.s. soccer right here in the united states, and president obama has tweeted, to the women of our national soccer team, sorry i can't be there to see you play, but i'll be cheering you on from here. let's go. and you can catch all of the action as the u.s. women take on japan in the world cup final at 2:00 p.m. eastern on our sister station espn. that's it for our program. thank you for watching. remember, you can follow us any time on twitter, facebook and abcnews.com and be sure to tune in for the final score. watch "world news" with david muir for the latest on the ongoing debt talks as well. see you next week.

in the news this sunday, investigations are underway following yesterday's fatal police shooting in san francisco's bayview district. and less than two weeks after being acquitted from murdering her daughter, casey anthony walks out of a florida jail. beth! hi. looking good! you've lost some weight. thanks! you noticed! you know these clothes are too big now,